Less-than-truckload Dynamic Pricing Model in Physical Internet

Abstract : This paper investigates a decision-making problem consisting of less-than-truckload dynamic pricing (LTLDP) under Physical Internet (PI). PI can be seen as the interconnection of logistics networks via open PI-hubs, which can be considered as spot freight markets where LTL requests of different volume/destination continuously arrive over time for a short-stay. Carriers can bid for the requests by using short-term contract. This paper proposes a dynamic pricing model to optimise carrier's bid price to maximise his expected profits. Three influencing factors are investigated: requests quantity, carrier's capacity and cost. The results provide useful guidelines to carriers on pricing decisions in PI-hub.